Unclaimed wages likely to top one billion dollars

This article published in The Age (29 October 2018) and written by  Anna Patty refers to research revealing that migrants workers are being used as a chap source of labour in agricultural seasonal work, and in hospitality and retail. To do this, employers are holding back wages and other monetary entitlements.

A landmark study has found a substantial proportion of international students, backpackers and other temporary migrants were paid around half the legal minimum wage in Australia.

A landmark study has found a silent underclass of vulnerable Australian workers is owed an estimated billion dollars with almost a third paid $12 per hour or less – almost half of their legal entitlements.

The University of NSW (UNSW) and University of Technology Sydney (UTS) research found that fewer than one in ten migrant workers has taken action to recover unpaid wages, even though they know they are being underpaid. The remaining nine in ten suffered wage theft in silence.

Bassina Farbenblum, a senior law lecturer at UNSW said the study confirmed that Australia has a large silent underclass of migrant workers.

“The scale of unclaimed wages is likely well over a billion dollars,” she said.


“There is a culture of impunity for wage theft in Australia. Unscrupulous employers continue to exploit migrant workers because they know they won’t complain.”

The scale of unclaimed wages is likely well over a billion dollars

The survey of 4322 temporary migrant workers from 107 countries found that for every 100 underpaid migrant workers, only three took their complaint to the Fair Work Ombudsman. More than half of the low proportion of workers that complained said they recovered nothing.

The researchers said the Fair Work Ombudsman was not equipped to deal with the large-scale provision of remedies for individual workers. They said it had been strategic in focusing on higher profile cases representing multiple workers, including the 7-Eleven case of rampant underpayment that Fairfax Media exposed.

The new report found that most temporary migrant workers, who represent 11 per cent of the Australian labour market, have little confidence in trying to claim unpaid wages. It said 46 per cent of underpaid survey participants would not even try to recover unpaid wages.

Reasons included the fear of job loss, fear of consequences regarding their temporary migrant visa or citizenship and pessimism about the outcome.

UTS law lecturer Laurie Berg and study co-author says, “the system is broken”.

“The system is broken,” study co-author Laurie Berg, a senior law lecturer from UTS, said.

“It is rational for most migrant workers to stay silent. The effort and risks of taking action aren’t worth it, given the slim chance they’ll get their wages back,” she said.

The researchers have found that almost a third of people surveyed earned as little as $12 per hour or less even thought they were entitled to at least $22.13 per hour as casual workers. These group of workers excluded 457 visa holders.

A spokesman for the Fair Work Ombudsman said it is considering the report.

“It is a priority for the Fair Work Ombudsman to assist any migrant workers with concerns about their wages or entitlements,” the spokesman said. “The Fair Work Ombudsman is also focused on increasing awareness among migrant workers of their workplace rights and the resources available to them.”

An international student who worked in a Sydney retail shop for six years who spoke to the Herald on the condition of anonymity said he was paid $11 per hour for the first two years. He said he was required to work seven nights a week and studied during the day. In 2013 he was paid $12 per hour and promoted to a management role. More than four years later he was sacked after asking for a pay rise for his staff.

The Redfern Legal Centre calculated that Jay* was underpaid $270,000 taking into account his underpaid base rate of pay, penalty rates for night work, annual leave, sick leave, long service leave and superannuation.

Redfern Legal Centre sent the business a letter of demand requesting the payment of this money, but it wrote back and accused the worker of stealing from the shop. The worker said the allegations were baseless. The Redfern Legal Centre prepared an application to the Federal Circuit Court to claim the unpaid employment entitlements and to also seek penalties against the employer, but the worker was too scared to take his action to court because he feared his citizenship could be revoked and that the employer could tarnish his reputation in the community.

Redfern Legal Centre Employment Solicitor Sharmilla Bargon said underpayment for migrant workers is endemic in New South Wales.

“The report, Wage Theft in Silence, confirms many of our observations from providing free legal advice and representation to international students and backpackers at RLC,” she said.

“We frequently see workers paid as little as $12 per hour. That’s almost half the minimum

Ms Bargon said the study had identified key barriers that prevented people from coming forward. More than a quarter of study participants said they would not speak up because of fears of losing their visa.

Ms Bargon said one of her clients Kirin* was unfairly dismissed and underpaid for 18 months of work at a bar.

Wage theft is rampant and will ‘never be eradicated’, Queensland inquiry hears

“The employer had been paying Kirin $12 an hour cash in hand, well below the correct hourly
wage,” she said.

“RLC helped Kirin lodge an unfair dismissal claim in the Fair Work Commission, and
represented him in a conciliation. Because Kirin* came forward about his experience, he received $25,000 worth of compensation for his underpayment of wages and unfair dismissal.”

Ms Bargon said Kirin’s former employer threatened to report him to the Department of Home Affairs for working more than 40 hours a fortnight, in breach of his student visa. He has since become a permanent resident.

“If his visa situation had not changed, Kirin would have had to decide between recovering his lost
wages and the risk of deportation. Because of this, we were able to push back on the employer and they ended up paying Kirin for the hours he had worked,” Ms Bargon said.

“Many international students who find out they have been underpaid do not pursue their
wage claims because of the risk that they could be sent home halfway through a hard
earned and expensive degree.”

A worker who arrived in Melbourne on a student visa in 2014 said he was not aware of minimum wage rates when he received $14 dollars per hour to work in a cafe. He said he did not take any action against the employer for his underpayment because he thought it would be a “waste of time”.

“I kept quiet,” he said. “I didn’t want to draw attention to myself on a student visa.

“At the time, I thought the amount was good compared to what I would get in Malaysia,” he said.

“I resigned after about one month as I found out that $14 was too low for what I was doing.”

Not their real names

Unions NSW Secretary Mark Morey said migrant workers on temporary visas should be given a fireproof amnesty from deportation if they report wage theft.

“Migrant exploitation is a national shame that Australia must confront and fix,” he said.

“All too often the people cleaning our offices or serving us food are illegally ripped off.

“The growth of contingent visas is actively preventing many workers with foreign passports from enforcing their labour rights.”

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